Inflation and pmi. A brutal bond selloff. Called it here on the show yesterday. Yields up seven basis points. Time now for the global exchange, where we bring you todays market moving news from all around the world. Joining us from hong kong is bloombergs stephen engle, from , and london, tadeo guy johnson and dani burger, and in washington, kevin cirilli. In hong kong, protests are intensifying. Stephen engle joining us for more. What can he tell us on the ground . Whats happened . As you can see over here stephen as you can see over here, police have formed a line. There have been some sharp words between officers and people on the mezzanine level looking down lotsthem, keeping lots of of swearwords in cantonese going back and forth. This is a cleanup operation by the police after what was a very raucous national day celebration, if you will, or commemoration of the national day in china. Here it is a very different feeling as protesters, tens of thousands of them, came onto the streets today in defiance of the bans in multiple districts across hong kong. This is where the operation in Central Hong Kong moved. It is a tense standoff right now in the streets of hong kong on the evening of october 1. Alix really stark contrast to what we are hearing out of china, and president xi. What can we expect in the next when he four hours . A very its obviously tense situation because theres lots of reports among local media that one protester, a young teenager, may have been shot by a Police Officer. We have seen some video. We cannot corroborate that was the actual incident. Bloomberg news is trying to confirm that this actually happened. But if this is confirmed, that one of the protesters was actually shot by a live round of ammunition, police have confirmed they did shoot several rounds of live ammunition into the air, but now weve heard that one protester was actually hit in the chest. This could spark off more angst and anger towards the police. This is a situation that has gone on now for four consecutive months, 17 weekends in a row of violence on the streets, and no end in sight. So whats coming next . Thats the multimillion dollar question. Alix please stay safe. We go now to zurich come over Credit Suisses coo has resigned. Maria tadeo has more. What happened . Maria Credit Suisse is in full damage control. The chairman conceded there was a surveillance operation done to a former employee who left for ubs, but he presented this as a rogue operation led by the coo and global head of security. Both men have now resigned from Credit Suisse. Was it comes to the ceo, it determined there was nothing that would indicate he knew or approved of this operation. The obvious question, how can a ceo not know that this is happening, especially when he worked so closely with the coo . The chairman was also very apologetic, saying this should have never happened. It was wrong, it was inappropriate, and carries severe reputational damage for Credit Suisse. The investigation is now done. They want to move forward. But the zurich prosecutor is saying they still want to investigate this, in particular after the news emerged that a contractor who acted as a link between Credit Suisse and the private investigators was found dead week ago. Thank you very much. It is Boris Johnsons moment of truth. He will present a new deal to the European Union this week. Guy johnson has more. Realistic . Guy we will wait and see more, but an irish broadcaster posting overnight what it says is oris johnsons plan to resolve the says itrder impasse is Boris Johnsons plan to resolve the irish border impasse. What we will end up with his border checks five to 10 miles behind the border. Boris johnson is dismissing this, saying this is an old planned. But if this is a plan, the indications are not good. There seems to be a great deal of disdain about this plan, that it is basically a rehash of what was proposed before, and is unlikely to therefore pass muster. Boris johnson is saying it is an old planned, and he will be giving the updated plan to brussels. Tomorrow he delivers his speech at the conservative Party Conference in manchester. The expectation is after that, we will see the british pound being proposed. There is some skepticism it is going to be significantly plan that has the been put out. If that is the case, the move from brussels is unlikely to change a great deal. However, the pound is trading higher today. Alix go figure. Thank you very much we want to stay in london thank you very much. We want to stay in london because it was an anemic bond option for japan. Dani burger has more. What was behind that failed auction . Dani it all has to do with kurodas plans to steepen the yield curve. Those have been stiff enough to really alarm investors. Auctiony poor bond came in at the worst since 2016. The reaction was swift. Futures selloff the most since 2016. The cash market, once it opened, yields spiked. Then we saw a reaction, as well as spill over in treasuries, so we have investors starting to trade on this narrative that they are going to shift from bonds into stocks. We have the boj buying more etf than bonds, most likely. They have signaled they will slash some of their purchases. They really have a boj stamp of approval here with kuroda sounding alarm about how low yields have gone, so those plans to steepen the yield curve very apparent in this auction. Alix thank you so much. Finally, we come to d. C. , where the impeachment inquiry deepens. Giuliani, secretary of state mike pompeo, and attorney general william barr are all drawn deeper after allegations of the administrations contacts emerged. Kevin cirilli has more. Are we looking at . Has subpoenaede Rudy Giuliani come up with that phone call now in question between President Trump and y,raines president zelensk and whether or not the president was asking for political dirt on the democratic president will frontrunner. All of this comes as house members are in congressional but until Committee Chair adam schiff has still been working through the process. Yesterday there were also reports that secretary of state mike pompeo was on that trumpzelensky phone call. Otheres as pompeo and state officials are said to be asked i the House Intelligence Committee to provide documents, as well as any other information as it relates to that phone call. Meanwhile, another phone call now in question. The New York Times first reporting last evening that President Trump reach out to australian Prime MinisterScott Morrison to see whether or not he would be willing to look into the origins of the Mueller Report and work with attorney general william barr. A spokesperson for the white house telling the New York Times that this was a and thewn investigation investigation was already made public. Either way, it is just the latest in a series of questions about President Trumps communications with global leaders. Alix thank you so much. Coming up on this program, we are going to have more of your morning trade analysis on the markets in todays first take. This is bloomberg. X time never bloomberg time now for bloomberg first take. Joining me are vincent cignarella, former trader and ,oice of bloomberg macro sqawk and gina martin adams. Joining us also is alessio de investmentesco senior portfolio manager. Come inside the bloomberg. You wake up, you see the headline, you see the selloff. What are you thinking . Vincent told you so. [laughter] alix he said this yesterday. Bond selloff, whatever. Wake up this morning, its true. Vincent the boj has basically signaled the trend or the rush to negative yields is over. They look to steepen the yield curve. Doing Something Like this on the same bid to raise the sales tax probably wasnt the smartest thing to do either. What we seen in the past and what we should see going forward, you raise the sales tax in japan, you crater the economy. It doesnt particularly look good for investors going forward. Lisa theres a big take away here we think is really important. We also got really bad pmi data out of europe, and globally we got the wto downgrading the Global Economic growth projection for the third time in a row. We have a lot of negative news, youre seeing bonds selloff, yields go higher. Bonds selloff, yields go higher. This is all a because the bank of japan and their bond buying speculation. This shows all the people out there saying negative yields actually makes sense in a slow growth, low growth world, where it is worthwhile paying to park your money somewhere. Those get thrown out. This is purely technical. The second there is any pullback, it is going to be a global. That is significant. I think lisa is raising a very interesting point. The data has been absolutely awful on a global basis for a year now. The only asset class that really reflected that cleanly was bonds. Bond yields have been falling steadily, and now you find yourself in a situation where further negative news on the Economic Data doesnt necessarily trigger bond buying because the price has already been priced, so something has to give. I think with this could set us for is an environment where in q4, we may have this challenge where bond yields need to reprice to an equilibrium. They need to reprice to a term premium that makes it safe to go into Asset Classes while equities remain a little at risk. Alix isnt this a good thing . Dont we want a steeper curve . Ix basis want s points on twostens . Isnt it good for the banks . Sio i think alix no, no. Lisa ill tell you why. Theres no projection that any central bank will be successful in a guiding growth. This does not make sense anymore. If the Central Banks arent going to full stop. Vincent if you like what the treasury has to do going forward, it is a civil supply and demand issue. A which was your point simple supply and demand issue. Alix which was your point yesterday. Vincent but its not horrible. We will get to an equilibrium level where investors are going to see a positive return. This is going to create income going forward, but there is a hiccup in between. Talk about bond selloff in the end of the current regime, lets put the context of relative magnitudes. Could bond yields in the tenure treasuries in the 10 year treasuries in the u. S. Go back to 2 . Yes. It is a lower beta markets will , say 15,action of that 20 basis points. That will create that term premium. Before we go there, with this rising bond yield, the next question is, to lisas point, if bond yields are rising in the economy is still decelerating, how does that make me feel about stocks . How does that make me feel about risky assets . Alix good. [laughter] alessio true, but that is where the next round of demand could come from. Stocks havent yielded any are yieldingtocks ground. The demand for bonds welcome back. Lisa there has been a rotation, and that is what everyone will. 2. You saw gains stem from the point whatever one will two. Thesaw gains stem from stock market. Wheres the Growth Prospect in equities . Alix do you go to the banks . Lisa a lot of people think so. Alessio the first hint of this was september 5, september 6, that massive turnaround in value versus momentum. What was the first catalyst of that . A day like today. It was the bond selloff and strict steepening of a yield curve. But that is just the beginning of this. We could see before we even have the overall equity asset class hit by this, we may have a sector rotation story. We may have a factor rotation story that reshuffles the equilibrium. Remember, that value momentum spread has been historic, so there is some adjustment that could take place there as well. Vincent i think that is going to go into the Second Quarter of next year. The delay in the tariffs from september to december i believe has pulled a lot of growth from the First Quarter of next year into this year as people are buying ahead of basically a tax increase, similar to what we saw in japan. We saw good growth going into the sales tax. We will probably see Slower Growth in the Fourth Quarter. For the u. S. , it is going to be a quarter delay. We will see good growth in the Fourth Quarter as people bring sales into the q. As corporate profits slow, willies slow, maybe people find the more attractive. Peopleesterday in japan, were running out and stockpiling goods on a country scale. I other point is we had that rotation, but then it didnt last. You may get some kind of count . Ut, but does a week i dont know. Alessio thats the kind of context we could focus on. I think the key question here is with the bond yields, i dont think we are looking at a massive bond selloff thats going to send yields materially higher. Going to send yields materially higher. I think this is investor pushback at a time of growing uncertainty of what investors can do. They are reaching the end of the munition they had. German yields are going up after the weakest pmi data, so they do not think the central bank can do anything to lower yields further. Can the reese fiscal stimulus, can there be Something Else can there be fiscal stimulus, can there be some thing up to ignite growth . It is going to come at the expense of stocks. You are already seeing the average income come down. You are already seeing leverage ratios to cap. This is considered leverage ratios tick up. That is what you are talking about. Vincent i totally believe we are going to cycle from equities into fixed income. You never know. Without fiscal stimulus, things are going to abruptly shift in different parts and different sectors of the world. , the finance minister is already pushing back. Without fiscal stimulus, without central bank buying, who wants to own this stuff. If the biggest buyer on the street and annexed traders off the bid, i dont want to be there. Alix fair enough. Alessio this year we have been Proactive Central Bank easing, proactive Monetary Policy easing. The Growth Numbers have been bad, and yet valuations continue to rise. The next narrative will be, is that enough, or do we need proactive, coordinated fiscal expansion . If you have one country in isolation doing fiscal expansion with the amount of bond demand there is out there, you are not going to get a steeper yield. Urve i am of the belief that, given how controversial fiscal expand is globally, you are more likely to get coordinated fiscal expansion after the recession is in front of us. Alix when it is too late. Francine when it is too late, but that Silver Lining could be something, that we are already talking to we are already starting to talk about it. That banks have to go back into the zero bound or close to the zero bound. Thank you for joining us. Alessio de longis of invesco will be sticking with me. Check out all the charts we used and more throughout the show, gtv on the terminal. Check it out. This is bloomberg. Viviana you are watching bloomberg daybreak. The chief operating officer of Credit Suisse resigned in the wake of that spying scandal. E is assuming responsibility for surveillance of one of the banks former executives. He says he did not discuss it with the ceo. Before becoming to the bank, they worked together at several jobs. Further rounds of tariffs could make matters worse for a 1. 2 increase in trade falling this year 2. 7 next year. That is your Bloomberg Business to 0. 7 next year year. This is your Bloomberg Business flash. Apple will not be exempt from tariffs for components on the upcoming mac pro computer. That is even after it announced it would be keeping some Assembly Operations here in the on 10 other charts that were made in china. Coming up come of the peoples republic of china celebrates the 70th year of it sounding with a trade war in the background. With euan rellie, bda partners managing director. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Alix this is bloomberg daybreak. Happy first day of the Fourth Quarter. 90 degree weather in new york. Happy october 1. Best nine months so far since 1997, continuing to build on that, but have we anywhere . One still right around 3000 on the s p. In europe, a little bit of softness due to weaker pmi, weaker inflation. The yield curve is steepening, due to what is happening over in japan. If we switch up the board, we had a 10 year option. That did not go well. Selloff filtered out throughout other bond markets into the u. S. , particularly here. Curves offthe yield by seven. I want to highlight what is happening with the aussie dollar because that central bank did end up cutting rates, adding onto the weaker rate cutting Central Bank Stimulus story globally. Today also marks the sieving death anniversary of the founding of the the 70th anniversary of the founding of the peoples republic in china. President xi rejected a message of strength. Xi theres no force that can shake the foundation of this great nation. No force can stop the Chinese People and the chinese nation from forging ahead. Comes amidnniversary a backdrop of trade negotiations and Foreign Investment in china. Michael mckee has a closer look. Michael we watch the financial flows in and out of china because we had china is the second biggest economy in the world, also a major slowly and the financial world. Take a look at the market cap of the chinese economy, both the chinese and hong kong economies, the blue and yellow lines there, put those together and youre about 12 billion. Look at the United States, though. 32. Nd china is a land of opportunity, but not yet one are taking advantage of the way that they do with the u. S. The president with the lot on u. S. The president had agreed a lot on per luminaries. Was an immediate slump in foreign direct investment, but it has rebounded. Companies are still putting money into china. The president is considering the idea of capital controls on flows into china. That would be a major problem for the chinese, not just because it disrupts the markets, but look at their current account. They have been losing in the current account for quite some time now, and for a couple of quarters in 2018, they went negative. The moving average in green, what this is telling you is china is becoming a net borrower. As they stimulate the economy and try to grow, they need capital coming in or they are. Oing to have problems everybody wants to get into the u. S. Treasury market. Let it . Want to alix thank you. Rellie, bdas euan partners senior managing director. Alessio de longis of invesco is still with us. Euan i think private he investors i think private investors and stockmarket investors want to have access to this market. I think people are a little more cautious than they were, but it seems to me that this despite the slow down, people still want to be there and theyre looking for their best path into the market. Economics does a tremendous job looking at the different growth potential. It is still around that 5 level, but what you see . Governmenthinese likes to project stability. We were talking before the segment about that. We certainly see a slowing down. It feels like a recession to some degree for Chinese People, but nonetheless, obviously the process thats been made over the last 70 years, theres a certain amount of momentum in the economy. Able do you see china as to stabilize Global Growth as we saw in 2016 . Yes alessio yes. Alix you do . Alessio yes. We see this emerging markets recession defined as basically growth being below trend and still decelerating. Lets talk about a growth recession. Under this environment, it is that for Chinese People. These Economic Conditions already leading to potentially rising unemployment rates. Especiallyket, equities, have priced this fairly well. You dont necessarily see it if you look at the overall performance of the equity market, but if you spread the performance to developed markets, particularly the u. S. , you can see it is through a Global Expansion that emerging markets have lacked meaningfully versus developed markets, which tells you they are on a risk premium basis. The pmis unfortunately still look very weak, but the next leg he higher, when this global deceleration ends, china will end it. Euan they sears alessio there is a surprising thought around sears. Such a big market it is unavoidable for institutional investors. Go . working you not im thinking specifically about tech. We saw tencent and alibaba get whacked on friday. Alessio i think people want consumer exposure. The sense is you have an emerging middle class that are beginning to behave not that differently to the way consumers behaved in london or new york. Certainly in the coastal areas of china, some very developed market, now frankly. Consumers are doing well there, domestic and regular consumer brands. Alix so how do investors look at the trade war . They are looking at becoming more isolated because of trade issues with the u. S. Isn i think the trade issue discouraging people. Investors are hoping for a swift finish. You are seeing significant pressure by business to political leaders to end the trade war. We will wait and see about investor attitudes at the moment, so theres clearly desire for someone to be invested, but nervous about how long this trade war might run. Alix do you get the impression as an investor that there is cannot there is anything that assisted trade war . T order of magnitude alix alessio that attitude that minimal confidence channel you try to affect, it is about swapping that private growth and chain versus public growth engine. China is gradually becoming a net borrower. The u. S. , by sibley being the reserve currency of the world, needs to remain a net borrower cost of this creates from a global standpoint quite a challenging situation. The place where i need to apply savings are europe and japan, but if they want to do fiscal expansion and ranging euro growth, not everybody can spend and not everybody can save, so where is this baton of responsibility going to shift around the world . Alessio we also have a very euan we also had a very unusual ruhr so of behavior whereby the u. S. Is putting up trade barricades to block the chinese, behaving like theyre going deliberate lines. Ofx alessio de longis invesco, thank you very much. Euan rellie of bda partners will be sticking with me. We do want to get an update on what is making headlines outside the business world. Viviana hurtado is here with first word news. Viviana several of president Donald Trumps closest allies are being drawn deeper into the impeachment inquiry. Three house committees subpoenaed his lawyer Rudy Giuliani. Bloomberg has learned secretary of state mike pompeo was among those listening to a call between the president and ukraines leader in july. That is the call at the center of the investigation. North korea says this weekend, it will resume Nuclear Talks with the u. S. , referring to level. Ons as working during a meeting in june, kim jongun and President Trump agreed to hold talks in a matter of weeks, but they have not discussed details of an armament deal. Today, as we have been reporting president xi jinping overseeing a military parade through the center of beijing. It featured some of the countrys most advanced weapons. Among them, one of the worlds longest range missiles. And hong kong, a very different , marched intesters simultaneous rallies across the city. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im Viviana Hurtado. This is bloomberg. Alix fx very much. Still with me is euan rellie of bda partners. I want to dig deeper into Hong Kong Kevin what president xi talked about, complete unification of the country today , and a complete disintegration over in hong kong. Theres a really interesting millennialshows how in hong kong identify themselves as hong kongers instead of chinese. Euan i think it is very difficult, and this is bad annual mediahe representation. Alix how do you see this . Isrupting xis agenda euan since the handover from british power to chinese rule, hes been hoping he has a true one china now, and hes facing simultaneous turmoil in tibet, chin zhang, taiwan, and hong. Ong even though they have very strict contrast of the very strict control of the press in china, i think the to domestic population is aware of these worries. Alix euan rellie, thank you so much. Bda partners. Oming up, it is the next twist thiam its exonerated, but his partner and coo takes the fall. Go to tv on your terminal. This is bloomberg. Viviana you are watching bloomberg daybreak. Coming up later today on balance of power, jeffrey sachs, Columbia University professor. Now to your Bloomberg Business flash. Saudi aramco is fully recovering from the worst ever attack on its infrastructure last month. Missiles and drones carrying explosives struck some of aramcos biggest processing plant. The attack knocked out about 5 of global oil supply. Aramco saying it is actually pumping more than it did before the attack, and it didnt miss any contracted shipments. Canceled or deferred any of our customers during september, so we give them whatever they asked. Viviana Oil Prices Rising sharply the first day after the attack. Since then, they have given up most of that gain. Big tech about to face another congressional hearing. The u. S. Small Business Committee plans to invite onebook, amazon, and google how they may be damaging the Competitive Landscape for small business. Tech giants already facing investigations. Democratic president ial candidate Bernie Sanders calling for a new Corporate Tax aimed at narrowing the gap between what Companies Pay their ceos and their workers. Sanders has been campaigning on reducing income inequality. Im Viviana Hurtado. Thats your Bloomberg Business flash. Alix thank you so much. We cover three things wall street is buzzing about this morning. First up, Credit Suisses coo takes the fall. The ceo is exonerated as the coo takes the fall for the spying scandal. And investors are gathering today to discuss the system for ipos after a series of flops. And dorm room hedge fund. A hedge fund that began in a college dorm is facing scrutiny by the sec. Joining me is bloombergs sonali basak. Lets start with Credit Suisse. How is it possible that Tidjane Thiame did not know what the coo is doing . Sonali thats definitely the question. Bloomberg opinion posted the exact same question. Coo. E bouee was the he was in charge of surveillance, there surveillance, so there is a chance this was isolated, but should the Senior Executives should have been more coordinated here . Maybe. Alix is this a big deal that he is leaving . Sonali it is a big deal because he has worked with him for more than a decade. So yes, hes losing not only his star wealth manager ubs, hes now losing a close ally whos been with him for many years. Alix and prosecution could still come up for something. Sonali thats exactly right. This is an internal investigation. Prosecutors have not said anything since launching their proceedings. Alix this is basically a Silicon Valley ipo summit. Guys, wheres our ipo pop . Is this what it is . Sonali venture capitalists have been complaining because they dont like the ipo pop. They want things to be more stable because otherwise, they are leaving money on the table. Here you have hundreds of mpaniesly held co and their executives invited, but banks were not. Nike,e the president of who helped lead. Ot of the direct listings they are trying to do this process in the future more Technology Oriented rather than the bankers. Alix that feels like a direct listings versus through the bank. Sonali we have mike morris of sequoia, whos been very vocal about this. Bill gurley, who told me he is not antibanker, hes pro algorithm. [laughter] sonali i encourage everyone to read our story today. Alix lets go to our third story, which is a really fun one. Basically, this guy and a dorm room started a hedge fund which totallyis saying is fake. Sonali he was running about 400 Million Dollars here. He started with friends and family. The sec is now saying he inflated the value of his assets and deceived investors. The investigation is aggressive and extreme. How, ifjust dont know youre looking at securities, you can be too extreme or not. Sonali this never looks great. I encourage everyone to go back and look at the 2015 interview bloomberg tv did with him. Hes a very quirky person, actually. He was running the hedge fund while doing his phd on the side. He was using all of these very wonky metrics for economic forecasts, one of them being pet adoption rates. The more people would adopt pets, the better the economy seems to be. Alix i dont totally disagree with that. [laughter] alix thanks a lot, bloombergs sonali basak. For the central banker who needs a Little Something extra to get ahead, theres now a masters degree in central banking. It is being offered by the asian school of business in koala lump in infollow lump or ala lumpur. If you are headed out to your car, tune into Bloomberg Radio on sirius xm channel 119 and the Bloomberg Business at. Alix time now for traders take. Im joined by bill maloney, chartered technician. Youre going to take us through some technical charts here. First youre looking at the s p. Thanks for having me here today. The s p still looks pretty good. Maybe double top resistance at the alltime highs, but you had very positive action yesterday, very positive take action on friday. Bounced right off the 50 day. Is theport also retracement level, and then larger support in this whole to basically38 2830. Then you have this uptrend. It is a pretty good, longterm uptrend from the may lows. Alix you are also taking a look at wells fargo. You did get a nice pop after the ceo, we got a new ceo coming in. It is a stock that has been really beaten up. They still have that overhang from the fed. What is the chart telling you . Bill believe it or not, wells fargo looks pretty good, too. Like you said, had the big pop on friday with the new ceo. Is can see the 50 day curving up, which is a very positive technical pattern. What i find most interesting about wells fargo, if i take the chart all the way back to 2006 and draw a line from that peak from the 2008 crash, you can see the support levels holding. Let me get out my pen here again. , 2018 and 2019. So you have broadbased Institutional Support around that level. So it looks pretty good above those levels. Alix then what we are looking at is boeing. Lots of conversation in the fundamental market about what the fix will be for the 737. Southwest is their biggest buyer, saying they might not see these until march of next year. For the chart, it has been a brutal ride for the company. What are you seeing . Bill again, not a bad looking chart. Youve had a big run up off of those august lows. Oops. It is basically nothing more than a trading range. If you discount all of the negativity, you have a trading that 400, but overall, it is in a trading range. The stock does not look that bad. Inx how tight does it get terms of the downside . William you want to look at the moving averages again. Alix love it. Good to get some technicals on the show. Bloombergs bill maloney. You can hear him all the time on the squawk on the terminal. Coming up, we also speak with rob mciver, Jensen Investment Management managing director. This is bloomberg. Alix welcome to bloomberg daybreak on this tuesday, october 1. Im alix steel. You got to the Third Quarter. Heres everything you need to know. China marks the 70th anniversary of the communist china marks the 70th anniversary of the communist takeover with a big parade in beijing. A number of new weapons were on display. President xis and playing president xi jinping declared that chinas rise is unstoppable. No force thates can shake the foundation of this great nation. No force can stop the Chinese People and the chinese nation from forging ahead. Alix in hong kong, police fired tear gas at protesters. Tens of thousands marched in simultaneous rallies across the city. Its back to the bargaining table for the u. S. And north korea. A korean diplomat says they will resume Nuclear Negotiations this weekend. The talks have been put on hold for months. Pyongyang wants the u. S. To drop to dropnd sanctions in exchange for partial disarmament. The u. S. House subpoenas Rudy Giuliani, and bloomberg has learned secretary of state mike pompeo was on the call between theident trump and ukrainian president. And in the markets, it was the best nine months for the s p since 1997. We are continuing to build on those gains, with futures up by 0. 2 , but still right around 3000. Eurodollar pretty much goes nowhere, but still a broadly stronger dollar story. You had a bond selloff that started over in asia, triggered by a weaker 10 year bond selloff in japan. The boj basically wanted to steepen the yield curve. That is leading to steepening all across the world. The 10 year is up by six basis points. Here with a recap of Third Quarter is bloombergs abigail doolittle. Abigail it certainly was an interesting quarter, and yes, perhaps shades of risk off. First of all, starting with the major equity indexes, but we are looking at is a chart going back to the president ial election in 2016. We see for the most part gains, the quarterly moves for the indexes. Russelllso throwing the 2000 and the dow transports. What i would like to point out come of the Third Quarter of this past year, also mixed signals. We are seeing that the nasdaq was slightly lower, the first time weve seen that going back to last year. Same thing for the russell 2000. That is perhaps risk off, the fact that you dont have those index is higher. Supporting that idea, here we are looking at the Third Quarter in yellow, and white treasury bond futures, in blue the s p 500 futures right around the time of that fed meeting. Gold taking off come upon sticking off, stocks going lower. At the end of the day, both gold and treasuries, haven assets, outperforming stocks. Finally, take a look at oil, going back to 2008. Over this time, these are the quarterly moves. And the, but the second Third Quarter both down. Two down quarters in a row. Third quartergest overall did have a tad risk off tone that you were suggesting. Alix thank you very much. Thes p up nearly 19 for of 2019, thenths best since 1997. With me now is rob mciver, jensen investment portfolio manager. Is going to be an interesting Fourth Quarter. There is a definite risk off tone to the markets, and we certainly caution investors to position themselves accordingly. Alix how . Rob particularly at jensen, we prefer High Quality Companies with advantages that have the ability to have the robust Balance Sheets and cash flows that provide a safe haven in times of trouble. Alix do you think the times of trouble will be, look, weve had this runup, theres not going to be a catalyst to the upside . Or is there going to be a black swan that leads to lower equity prices . Is sometainly there good news in the u. S. , but the trade wars are starting to manifest in the u. S. In more concerning business confidence, slowing down insert manufacturing, so all in all, we think investors would probably be well advised to be a bit more cautious. Alix how do you look at Something Like today with the bond selloff . Is that a harbinger of things to come, or the central bank engineered thing . Rob probably a little bit of both. Bond market is more globally suggesting there are some recessionary pressures growing around the world, whereas in the u. S. , perhaps they are a little more positive. Overall, the tone in the bond markets does tend to be a little negative. Alix when you look at Something Like today, when you have a steeper curve, it is like, great. Go buy financials. On the other hand, we have tepid growth in europe, and now a steeper curve. Which is which . Rob s the 64,000 question. The market is trying thats the 64,000 question. The market is trying to figure out exactly that question. The risk off tone we seen recently is manifesting itself, so we would suggest if you are going to be in equities, now would be the time to be more focused on Quality Companies. Alix some calls like bank of america saying they see 6 upside for european equities. Jp morgan says you want to rotate into european out of u. S. Equities. Any of that interesting . Rob i think europe has some challenges, as we know. Theres some real concern that germany, the powerhouse of the european economy, is slowing down. Weve seen that another euro zone economies as well. They are easing Monetary Policy over at the ecb. There are some problems, so it might be a little more aggressive than at jensen. We prefer High Quality Companies that have quality globally. Alix what do you make of the conversation of monetary versus fiscal stimulus . You brought up fiscal easing, but you need the stimulus. What shows you that its going to get the best bang for the stimulus buck . Tax the competition of policy, Monetary Policy, is all geared to helping the Global Economy grow. It is important we are in a very low Interest Rate environment already, so absence of meaningful quantitative easing programs, you will need investment to see you through what could be troubling times. Alix if you are already recommending getting defensive, how do you look at Something Like impeachment in d. C. , that is so hard to quantify when it comes to market risk . Rob that is a very difficult call, and we will have to see how that plays out. Certainly politics is a headline risk. We will see some pretty sharp moves if the impeachment process continues the way it is pointed at the moment. Having said that, once that uncertainty is out of the way, the markets tend to revert to reflecting the shareholder value that companies are generating. Could be shortterm concerned there. Longerterm, i think if you are in good, solid businesses, you should see that is all right. Alix how should that play into 2020 . Rob 2020 is probably going to be another volatile year. We saw that in q4 of 2018. The risk off nature can happen very quickly. Again, that is why we caution investors to perhaps be a little more defensively positioned in quality businesses. , we where do you think will get to specific stock picks in a second, but where do you think the market is getting it wrong the most . Where is the biggest mispriced . Rob we tend to think a little more holistically and try to understand the economics through the lens of the companies in which we are invested. Aggressive intoo any particular area, particularly in these volatile you some caution. Thats why we would say folks should be a bit more cautious in this environment. Of jensenmciver Investment Management will be sticking with us. Thats coming up next. This is bloomberg. [singing] alix alix you are looking at live shots of an unbelievable celebration of chinas 70th anniversary of the peoples republic of china. Celebrations have been going on for a few hours now. A tremendous amount of people, lights, and spectacle. We heard earlier from president xi, who talked about the founding, about stability in hong kong, and it he among chinese ethnic groups, and complete unification of the country. We also got quite the military display earlier. An unbelievable celebration happening in beijing. We will keep you updated on the celebrations. Meanwhile, and the markets, it is the end of the Third Quarter, so the lets pick the winners and losers. Rob mciver of Jensen Investment Management is still with us. If you come inside the bloomberg, we show the best and worst stocks of the last quarter. C, macys, ux lta, netflix. On the upside, target, western digital. Ck . T is your top pi rob for us, companies that can generate high levels of return on equity over long time periods. We take a company like pepsi, for example, one of our top positions in the quality portfolio. Tremendous competitive advantages, solid balance sheet, flow. F free cash it uses that cash flow to reinvest in its business, to make acquisitions, to pay dividends. Pepsi has paid dividends for 47 consecutive years. And to buy back shares. We find that a very compelling opportunity. Alix do you add to shares now, or just hold them . Rob i think investors should be very selective. Theres a lot of diversity in terms of returns. At jensen, we favor those companies with durable competitive advantages, money machines that can make money in good times and bad. Alix what about mastercard . What did stand out is there was old have beauty there was but thosey, macys, got hit on consumer exposure. What about mastercard . Rob mastercard is a dominator in terms of electronic payments. They are a huge factor in cashless transactions. Importantly, it doesnt have exposure to Consumer Credit lists like the banks. It is purely the final. Purely the funnel. Alix what happens if the consumer gets hit . May beortterm, there some headwinds for the share price in the very short term. But the large shift from cash to cashless is so powerful on a global scale, we thing mastercard is wellpositioned to take advantage. Alix why mastercard versus visa or amex . Rob mastercard is smaller than visa, but far more profitable, and it meets our minimum 15 return on equity over 10 consecutive years. That ability to make money in good times and bad. That is why we prefer mastercard. Alix one of your others is broadridge financial solutions. I dont even know if i really know with this company is, im going to be honest. Rob it is a business not many people have heard of, but it is critical to the plumbing of corporate america. Of ridge processes processes 80 of shareholders. Corporate america has to communicate with its shareholders. Alix what is the Downside Risk . Rob for broadridge particularly, most of the competitors our inhouse solutions. Is so efficient, it is difficult to see inhouse solutions growing at the expense of broadridge. Alix what are some of the derivative plays around this . Whats the next stock out there . Thatthe next stock is one has all of our high quality components. Even though valuations are looking stretched in many cases, we still see some opportunities. For example, weve recently added General Mills to our portfolio. Nothing fastestgrowing business, but solid, robust position in the marketplace, with strong brands, and able to produce the returns we are looking for for our shareholders over that longterm. Alix how do you look at margins . I feel like the narrative is that margins have peaked. Pepsi and General Mills will be front and center for that. Rob yes, but these companies have such dominant positions in the marketplace, they tend to be market leaders. They are in a position to grow their margins, perhaps not at the rate of the last 10 years, but improving steady growth, that is what we are focused upon. Alix is it going to be good enough . Rob we think so. Alix at whatalix point alix at what point does it not become good enough . There are aly, couple of reasons to sell the business. The first is the return on equity starting to deteriorate. That is a warning sign that margins and the Business Dynamics have changed. Second, the share price valuations exceeds our value. We still see some opportunities there. Alix lets take a look at earnings. If you come inside the bloomberg, you are looking at s p versus revisions. The Overall Index outpacing some revisions. Theres two stories. One is that you wind up seeing revisions come down even more, particularly for 2020. The other is you have seen cfos start to revise their guidance down more. Where do you stand . Rob we like the characteristics one of the characteristics of the companies we favor, their margins tend to be much lower than the broader market, for example, the s p 500. , ande a lot of value there consistent shareholder value creation. Those are the companies we favor , and therefore, they tend to be a little less susceptible to those forces is mentioned. Alix rob mciver of Jensen Investment Management will be sticking with me. This is bloomberg. Viviana youre watching bloomberg daybreak. The chief operating officer of Credit Suisse resigned in the wake of that spying scandal. Pierreolivier bouee they said not discuss the scandal with the ceo. Apple will not be exempt it from tariffs on five chinese made components for the upcoming mac pro computer, even after apple announced it was keeping some Assembly Operations in the u. S. The wto cutting its outlook for global trade growth to the weakest level in a decade. It is warning further rounds of tariffs could make the matters worse. The forecast calls for a 1. 2 increase in trade volume this year to 2. 7 next year. That is your Bloomberg Business flash. Alix staying on trade, the International Energy agency could cut its Oil Demand Forecast because of weakening Global Economy, gritting to the executive director. A few weeks after an attack created concerns about oil supply. He spoke to bloombergs matt miller about why there wasnt a bigger dip in oil after those attacks. There are a couple of reasons. The first is saudi authorities very quickly moved and reassured the markets they would come back very quickly. Many other players such as the International Energy agency said, please calm down. We have enough stock with other countries, and if there is a need, we will be bringing those stocks into markets no problem. This is one reason. Oilnd, the United States production is still growing strongly. Theres a lot of oil in the markets. We didnt see a major jump in the price just before the crisis. Have beenthe saudis making remarkable progress in restoring production and exports. Do you know where they are right now . Have you heard recent numbers . H they are very close, if not almost there, with production and exports. I have no reason to doubt their numbers. Iea has expected growth to be above one Million Barrels a day this year and next. Is it still the case . Is that still your forecast, given the slowing Global Economy . Expectwe currently growth of about 1. 1 Million Barrels per day this year. It is much lower than the historical averages, which are much higher, but also, looking at the Global Economy weakening, china, the driving little oil demand experiencing the most growth in 30 years, the advanced economies are slowing down. We may well revise down our inbers, our demand numbers, the next days or months to come, if the Global Economy continues to weaken. Rol, ieaat was fatih bi executive director, speaking with at miller. With me still is rob mciver of Jensen Investment Management. Do you own any Energy Stocks . Rob we do not. They do not meet our men among 15 return on equity for 10 years our minimum 15 return on equity for 10 years. They dont command the price points of their end product. Alix even big oil . I understand for shale operators, it was services. But big oil, they have nice dividends, but still not quite big enough . Rob not quite profitable enough. Their margins are not consistently profitable for us. We think the truly profitable part of the energy is the expiration production, but as you go down the line, every rivet of becomes more and more commodity like with less pricing power. Alix we are talking about demand weakness in light of the trade war, the wto revising down again. Based onou avoid that macro picture . Rob energy is one of the areas where we are not focused at the moment. We Like Companies with solid competitive advantages and annuitylike streams of earnings. The oil markets, even the pure play banks tend to be too highly regulated to make the consistent profits we are looking for. Alix is health care something that is more insulated, or small caps . How do you view those . Rob we ought specific levels from health care companies. Striker united health, they have those annuity like earnings we favor in the cash flows that the play for shareholder benefit. We recognize that, for example, united health, there is some headline risk as well ahead of next years general election. Alix interesting. Rob mciver of Jensen Investment Management will be sticking with me. Coming up, you are looking at a tremendous live shot of tiananmen square. They are celebrating the 70th anniversary of the founding of the peoples republic of china. All of that happening against the backdrop of intensifying protests, violent protests, and hong kong. We will discuss how political develop affects investing discussions, but the growth of china will be, and how hopes and dreams have stacked up against reality. This is bloomberg. Alix alix this is bloomberg daybreak. I am alix steel. Futures right around the 3000 level despite the fact that the last few months have been the best for the s p since 1997. European stocks go nowhere, even the banks go nowhere. A big reason for the move in the bond market. You had a failed auction in japan for 10 years. Part of that is the bank of japan stepping back for longerterm bond buying. That had a Ripple Effect all across the world. You see the curve steeper. Six basis points for the 210. The aussie dollar cut rates again. It continues the conversation of Central Banks cutting and raises the question of how much firepower they have. Anniversarythe 70th of the founding of the peoples republic of china. Beijing is celebrating with unbelievable pictures and events and music. On the flipside, you have hong kong, where protests are intensifying. Joining us with more on the ground in hong kong is stephen engle. The pictures are quite stark. What has happened on the ground in the last 12 hours . Stephen a very different commemoration in hong kong for the 70th anniversary of the founding of the peoples republic of china. Hong kong does belong to china riotousave been in this situation i should not use the word riotous because protesters say they are not rallying, they are demonstrating for what they have been promised a high level of autonomy, which they say beijing is starting to infringe upon. I wanted to set the scene here. There been running battles all day long here is some graffiti liberate hong kong. There has been pitched battles all day long. 31 protesters have been hospitalized so far. Does are in critical condition. One is in serious condition. We have confirmation from the police that a Police Officer did shoot one protester with a live round of ammunition and hit them in the chest. We do not know the persons condition. Thislls you how far protest movement has gone and how far the police have gone to rappel it. This just within the last hour was a barricade fire. It has now been put out. There are remnants like this all over hong kong this evening as edgeity is completely on while beijing, a very different celebration for the anniversary of the founding of the peoples republic of china. Stark pictures. Please stay safe. With the protest as the backdrop, xi jinping still projected unification of the country and stability. Socialist china is standing in the east of the world. There is no force that can shake the foundation of this great nation. No force can stop the Chinese People in the chinese nation from forging ahead. Look isre with a closer bloombergs michael mckee. Michael i am going to show you three charts. They all look the same, rising from left to right, but they tell different stories about the chinese economy. Lets start with the chinese economy and its explosive growth. The clinton when Administration China into the world trade organization, the feeling was it would help china grow and play by the rules. It helped one of those things. You can see the explosive growth of the economy. No one cared a lot in 2001. 14 trillion. It is the second largest economy in the world. There is agreement china does not play by the rules. Intellectual piracy, that sort of thing. That is behind the trade wars. How did china get there . One way they did it is explosive growth in debt. The government has financed through its Banking System that it controls and through the provinces the construction of the massive infrastructure they have dealt they have built. The question nobody knows is who will pay that back and what happens if they dont . Much of what china does is inside chinas borders, not consider the same kind of Systemic Risk europe was went greece and italy got into trouble. There is still question overhanging the chinese deck picture. The other thing you want to look at is the change in the economy, how they have moved from an export driven economy toward a consumer driven economy. You can see that in the numbers for the last five years. The exports have leveled out. China has definitely pushed into the Consumer Sector and moved away from an export driven economy. It still plays an outsized role in global trade. Alix great set up. Bloombergs michael mckee. Joining me on set is shawn henson and rob mciver of jensen investment is still with me as well. ,hen you take a look at china is it an Investment Opportunity or is it a risk . Where have we gotten to and where do we go . Clearly china is both. China is the biggest hope in terms of the deployment of capital at scale in solving some of the World Biggest problems poverty, economic inequality, environmental concerns. And of course focused in the wrong way, without partnership and accompaniment with the rest of the world, is a huge threat. What china tells us is that the deployment of capital at scale, private capital, blended at cane with public finance, and will have huge impact on chinas national priority. That is something we have to consider as we face huge challenges and we figure out how we will deploy that level of capital at scale to solve some of the problems we face. Alix in some way it is monetary theory. The coordination between monetary and fiscal policy, even if it is unofficial. Rob, how do you look at china . How do you see it . Rob we see real opportunity. Andrimarily invest in u. S. U. S. Domestic companies so we get the exposure indirectly through Companies Like nike. The recent results show there are still opportunities there. The China Business is still profitable and growing in strong doubledigit. Despite the trades, 90 is doing well. Nike is doing extremely well. Alix how do you look at that . Rob the work we do is focused mostly on leveraging of private areas nto environmental, social, governance, and what we are encouraged to see is an increasing willingness on the part of china to consider those factors as it looks to its own expenditures. You think about the belt and road initiative. Trillions of dollars of infrastructure invested in the country, 150 countries over the next 20 years that are the countries that will determine the future of the global climate. I was going to say, what we see is hopeful signs of an increasing realization that decarbonizing and thinking carefully about the climate footprint is something china will be prepared to do. Putting the money behind it is definitely china. It ties into a conversation David Rubenstein talk to hank paulson about this. Heres what he had to say about investing in china. An economy like chinas, where there is great room for energy efficiency, there are immediate opportunities to realize big savings by investing in technologies. Alix where is the opportunity . Where using the most money . This is a broader conversation. The most money and global focus . Alix where is more money important to environmental, social, and governance issues . What kind of numbers are we talking about . Sean i think the numbers on the growth or instruments like etf, which are significant, i think the numbers in terms of the growing appetite for green bonds and other more sophisticated Financial Instruments that address these issues headon are significant and exciting. Usb the question is there enough product out there you asked me the question is there enough product out there . The short answer is yes. The long answer is no. There is not nearly the sufficient level of investment or the sufficient level of sophistication in order to tackle these problems. That is why we get engaged on these kind of issues. How do we encourage the growth and awareness of these issues. How do we address accountability to make sure people can tell the difference between greenwashing and the real things. Those are issues that concern us greatly. Alix which is on a broader government basis but also from an investor. What is your land and how do you do that . Sean as high focused quality Jensen Growth Fund enjoys five globes on the investing index. The residual of our focus on quality and the companys management focusing on Good Governance being for the environment brought Stakeholder Involvement and makes for good business. There is opportunity. It is not without pitfalls. We think Quality Companies do not does not necessarily mean a bad score. They can work together. Alix who is going to lead . Sean i think everyone of us has a responsibility to lead. It is one of those questions that i think we have been looking at excuses for not doing things for a while, questioning whether we should act, questioning how we should act, those are excuses. Businesses is that this is not an option. We will have to invest in people we are not used to investing in. We will have to be patient with capital. We will have to take risks we are not used to taking. We will have to invest in countries and places we are not familiar with. That is an effort every single one of us, from philanthropy to growth funds, are going to have to address. Alix interesting. Sean hinton, saurus economic develop and fund ceo. Rob mciver of jensen, good to see you. I want to get an update on what is making headlines outside the business world. Viviana President Donald Trump and his republican allies are ramping up the pressure to unmask the ukrainian whistleblower, a big departure from the way both countries have handled allegations of corruption for years. It risks deterring future whistleblowers to come forward. Lawyers for the official are negotiating with committees over closeddoor interviews. North korea saying it will resume Nuclear Talks with the u. S. The countrys official news agency referring to the discussions as working level. During a meeting in june, kim jongun and President Trump agree to hold talks in a matter of weeks but the sides have not met since then to discuss details. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. At endming up, we are game. That is where boeing is in terms of getting the 737 back on the market, according to the ceo. This is bloomberg. Viviana this is bloomberg daybreak. Im Viviana Hurtado in the hewlettpackard enterprise greenroom. Coming up later today on the close, mark dixon, i wgc io. O. I wg ce now youre Bloomberg Business flash. Anotherh about to face congressional hearing, the how small Business Committee plans to invite amazon, google and facebook to testify on how they may be damaging the Competitive Landscape for small business. Tech Companies Already facing investigations. Last month, manufacturing in the euro area slumping. A new order saw the sharpest contraction in seven years. German factories experience their worst month since the depths of the Global Financial crisis. That is your Bloomberg Business flash. Alix thank you very much. It is time for bottom line. We take a look at three Companies Worth watching. Joining us is emma chandra, sonali basak, and Brooke Sutherland. You are looking at forever 21. The bankruptcy continues. Emma forever 21 filing for bankruptcy, a mismanaged expansion outside the u. S. Being blamed. Forever 21 stores in the u. S. Will continue to operate while the Company Works out a strategy to pay its creditors. Their own more than 200 million according to the company, and to turn the company around. In the meantime, there are a number of Public Companies impacted by this, not the least, mall owners. Simon Property Group really struggling this year, underperforming 7 through 2019. Compare that to a 20 gain for those retailers in the s p 500 retail index. In terms of comfort ted of dashing terms of competitive in the retail space, european Companies Likely to do well in terms of competitive in the retail space, european Companies Like to do well with this. A newer entrance in europe into the fashion space. Jeffries saying they are likely to benefit. Keep an eye on target. They have been on a staggering run this year, up 60 . Over the last few years they have been introducing private bands private brands aimed at the teen and generation z shopper. When i last spoke to the target ceo, he said to keep a close eye on those retailers who are struggling and what opportunities they might offer target. Is taking a look at goldman sachs. David solomon marks his first year as ceo. Sonali we have the stop down 8 , which is the worst performer out of the top five u. S. Banks. The firstre expecting year revenue will be down slightly. Also ittough year, but is pointed out that it is like when David Solomon got pulled over in his suv. He is moving fast. Has declinedolomon to comment for the bloomberg story, but he says it is no different than when he took over. He has a lot of hurdles to overcome, including turning around the trading business that has had a lot of headwinds. Alix thank you so much. The Third Company is boeing. For more, Brooke Sutherland joins me now. Boeing just getting an estimate cut it jeffries. More caution on the 737 max. Is boeing more cautious . Brooke they are sticking to their timeline. They think this will get put back in the air in the early Fourth Quarter. Dennis muilenburg says he sees boeing in the end game. In contrast, you have the southwest pilots union making comments they do not see flying again until january at best, march at worst. That timeline strikes me as more realistic. We have also heard from other regulators being more cautious on this, wanting to take more time to do their own analysis of that boeing system being blamed for those scratches. I do not see how realistically any American Carrier put that plane back in the sky until you have global consensus it is safe. Alix we do have a Vice President of product and services safety, a new position. Will this do anything to help restore confidence . Brooke it helps. I think it is long overdue. Reading this i was struck by why did this not exist before . Why did we not happen independent engineering safety that was its own entity . We now have the engineers reporting directly to the chief engineer and the Board Committee overseeing Aircraft Safety rather than their division heads. This is ensuring safety concerns go to top management right away and they do not get mired down in cash flow concerns. I think it is an important step and it tells me boeing sees the writing on the wall and the regulatory environment. We have heard a number of fahents recently, the taking its time with the 737 max. That organization getting a lot of scrutiny of whether it was rigorous enough in its assessments meant and its assessment of the max at whether it needs to change it scrutiny. With is boeing alix cash flow, where does boeing sit . Canke they have said they aggressively start delivering the planes they have parts, and all of the cash flow they did not get this year they can make up in 2020. I am skeptical. The pace boeing is talking about feels they cannot just taken 100 planes all at once. They have to bring them back into their schedule. I do not think that will happen in 2020. Some of that can get pushed to 2021 which pushes the cash flow to 2021. The other big had wide is the 77 7x. They have now pushed the first flight back to 2020. If youre not delivering those planes, that is another cash flow youre not getting. Alix Brooke Sutherland, so great to have you back. Coming up, the impeachment inquiry deepens. More on what i am watching and what you should be watching the next 24 hours. If youre heading in your car, tune into Bloomberg Radio, channel 119 on sirius xm and the Bloomberg Business app. This is bloomberg. Alix the impeachment inquiry deepens. Rudy giuliani, mike pompeo, and william barr all drawn deeper into the house inquiry after new details on the administrations foreign contacts emerged on monday. Joining me from the white house is kevin cirilli. Where does the white house stand right now . Kevin there are three things that if you are outside of washington you should focus on. First and foremost is that nancy losey is looking to have this nancy pelosi is looking to have this inquiry and it by the end of the year. This leads me to my second point. Mitch mcconnell has said he would have no choice but to take up an impeachment trial should the house do so. That said, the timetable for the Senate Remains unclear. He is suggesting, according to sources i am talking with, that the impeachment trial would be quick. There is an option that would allow them to have a quick option in the senate should they feel that be the case. Lastly, a lot of folks i was talking with the head of the ukraine impeachment inquiry story developing anticipated usmca or nafta 2. 0 would get finished by the end of the year. There is still that hope, but it sucks out all of the oxygen in the room with this impeachment inquiry. , orolicy, whether usmca pricing, it is more difficult to get done. Alix thanks to bloombergs kevin cirilli. That does it for bloomberg daybreak americas on the first day of the Fourth Quarter. Open, p jim the chief strategist kobe joining jonathan ferro. Pgime right around the chief investment strategist will be joining jonathan ferro. Europe, the spread to the u. S. , seeing high yields and a stronger dollar. That is the story of the day on the first day of the Fourth Quarter. This is bloomberg. Sometimes your small screen is your big screen. And with the Xfinity Stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Keep what you watch with you. Download the Xfinity Stream app today and get ready for Xfinity Stream tv week. Watch shows like south park and the walking dead october 7th through 13th. Jonathan from new york city for our audience worldwide. Im jonathan ferro. The countdown to the open starts right now. Jonathan coming up, beginning the Fourth Quarter with stocks advancing. Japanese sovereign debt at the epicenter of the selloff, sending yields higher worldwide. As the trade war simmers, president g tellingly chuck president xi telling the Chinese People there ride is unstoppable. Here is your Tuesday Morning price action. Futures bid up eight points on the s p 500, positive. 33 . Yields up eight basis points on the 10 year to 1. 75. A little bit more on that later. We begin with the big issue. Leaving behind a messy quarter. It has been all about trade. The trade war. Uncertainty around the trade war. The trade war has an impact on the Global Growth. The bar is for global business